Living a More Purposeful Life One Cent at a Time

Is $100 a Big Deal?

Tim Ferriss. He’s out of touch. If you somehow missed it, there was this one time when he spitballed the fact that people have $5000 in disposable income to spend each month on his podcast. No, dude, they don’t. But he’s not the only person who might be out of touch with money. Last week, I thought I was the one with the money math problem.

Last week, Des posted about the latte factor. Though I actually think the latte factor is very real–and I’m still dealing with the consequences of it every single day–I don’t think it is as crippling as some people make it out to be. She reminded people that they could still sip their coffees and carry on with their money goals. And she’s absolutely right. It is possible, no, it’s necessary, to indulge in things that truly bring you joy and still kick all sorts of financial butt. True story.

After reading her post, I went back to some of the other posts that I’ve read about the myth of the latte factor recently. Of all the posts I read, it was actually a comment that gnawed away at me more than anything else I read. Someone suggested that $100 a month on coffee isn’t going to make or break anyone. I was stunned. Is that reality and I somehow missed the memo?

$100 a month on any one thing in our household is a big deal. In fact, we have $300 set aside for spending for the month for two people. Some months that includes things like highlights for me and graduation parties for him. But other months, that spending goes towards prescription refills and Christmas presents. So, if I drank away $100 of that money each month, I’d be awfully limited in terms of, well, pretty much anything else. And if we both drank coffee at that price tag? It had better be some damn good coffee.

Automatically, my instinct was to think hard about our budget. Yes, there are areas where we could do a bit better. But it’s pretty efficient and lets us drive hard towards our goals. So the only logical conclusion is that I make a lot less money than I should. I mean, if most people can swing that kind of expense then we must not be doing as well as I think. How is it possible that for someone who has thought so hard about money for over a year, I got so out of touch?

But you know what? I don’t think the general population actually has $100 to burn on coffee each month. In fact, I know it. The Census Bureau puts the median income for Illinois households in 2015 around $50,000. Let’s assume that’s $50,000 after taxes. If two adults swig back Starbucks for $100 each per month, that clocks in at $2400 a year. Put differently, that’s nearly 5% of their income. True, 5% is a really small number. But if most people follow the 50/20/30 rule, that means people’s discretionary income makes up 30% of their yearly budget–and now 5% of that is sliced off just for coffee.

[Source: U.S. Census Bureau]

While it’s true that there are states with higher median incomes, they’re not that much higher. And let’s not forget the ubiquity of Starbucks. Starbucks is not just for the six-figure earner. Starbucks is for everyone. Why else would I pass six of them on my way to work? Why else would it be brewed on college campuses where people are so up to their eyeballs in debt that they have to make up words for it?

To say $100 is no big deal for most people simply isn’t true. People might actually agree. But that might actually be the problem. We can’t lament the fact that most Americans don’t have an emergency fund and then not bat an eye at an extra $1200 a year.

Is $100 a month the biggest challenge people face? Absolutely not. But if you’re really not sure if $100 is actually a big deal, think about how you would react to having an extra $100 a month. Surely, if you found a crumpled Ben Franklin staring back at you, you’d snatch it up. Right?

So Tell Me…You’d pick up the benjamin, right? Is an extra $100 a month a big deal to you?

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77 Comments

Mr. Mt and I each get $75 a month for “fun” money. That covers every thinkable thing we might want to spend on ourselves. From books, makeup, eating out, new skis, clothes, coffee, really anything that’s not groceries or the electric bill. Now I go to our local coffee shop at least every week to do some writing, and spend around $3 with tip. Maybe $5. So coffee alone eats up $20 of my $75. But I think no matter what people spend their fun money on, it’s important that it has a cap that fits into their overall goals. Our $75 gets auto transferred into a personal checking account to help keep track of it. After that, I don’t have to care what Mr. Mt is spending his on. =)

I agree here. I think it is less about what you’re spending on and more about making sure your spending fits in with your overall goals.

And I think that’s where the disconnect really lies. Most people don’t have the money to be spending $100/month on coffee. We know from the stats that most people don’t have a $1000 emergency fund and you have just pointed out a really easy way for them to get one built quickly.

But for the people that we hear from on the topic, $100/month is a really small piece of their budget. I have no doubt that Tim Ferriss can still hit his savings goals while spending more on discretionary purchases than the average family earns.

That said, from where I’m sitting any way that you can save $1000 a year is worth looking at. I don’t actually like coffee so my coffee budget is nil, but we canceled cable to save $100/month, so I’m with you on picking up the benjamin.

That was the most concerning part of the comment. This person was approaching it from an “ordinary” perspective. He wasn’t Tim Ferriss (or insert other megamillionaire). As someone who is fluent in financial literacy, that person is leaps and bounds ahead of many people. So what is manageable for someone who understands how to budget, can increase his/her income stream, and already outearns the average American probably isn’t normal or good or fine for most people.

And hooray for picking up money. Who am I kidding? I go out of my way to pick up loose change. If I ever found a $100 bill, my heart might stop!

I love this, Ms. Montana! Like you said, if you know what your limit is, it probably doesn’t matter how you spend it. But my fear is that most people don’t actually see that $100 as all of their spending money for the money; they view it as their coffee money for the month. Or shoe money in my case. Oops.

I love love love that you contrasted it with a) your real budget and b) EMERGENCY FUND SAVINGS! Because seriously, you’re so right. $1200 would be a kickass start to an emergency fund, and even just four months of saving $100 would address that scary stat that some crazy-high percentage of people couldn’t handle a $400 emergency expense.

And from everything I’ve heard about houses, those come up NOT INFREQUENTLY I’m so scared omg.

For a certain segment of the population, $100 a month is no big deal. The problem, I think, is that segment creates a lot of the images and messages we get from pop culture, so some of the people for whom $100 a month should be a big deal don’t realize it, and some of the people who know $100 a month is a big deal feel bad about it.

For us, $100 in a given month is not devastating. I mean, we spent almost that much on rides and fair food yesterday. $100 a month every month, though, is a lot, particularly when I can substitute making good coffee at home for about $15 a month. And, yeah, $1020 over a year pays for an (off season) week beachfront.

I worry about this from a PF perspective, as well. We’re no Kim & Kanye, but we are above average in terms of median household income. So, in a lot of ways, it might even be more dangerous for me to run around and say, “$100 is NBD.” If I seem much more average (thank goodness!), it seems like I’m giving a different kind of permission that is more easily justified. Or maybe I’m just overly concerned about nothing.

I think it’s a fair concern. There are a lot more people for whom “$100 a month is real money” than “$100 is NBD.” And frankly, if “$100 is NBD” to someone, they already know it. As “The Millionaire Next Door” tells us, the high net worth folks generally get there by not wasting their money.

Excellent post, Penny. If you have credit card debt, lack an emergency fund, and can’t fund a Roth IRA, then $100 a month is a lot of money. If you’re out of debt (including your mortgage), have a robust emergency fund, and max out your Roth every year, then $100 a month is a very reasonable indulgence. Most Americans, unfortunately, face the former situation and they should avoid Starbucks like the plague.

Or if they do go to Starbucks, it should be a priority. Not a routine that’s simply there because that seems to be how people live. As someone who shopped just to shop, I know what a slippery slope this can be. $15 here, $25 there doesn’t seem like much. But suddenly, it’s a lot!

Was I the one who made that comment? Because It absolutely sounds like something that I would say. . 😀

I don’t even LIKE coffee, and have probably spent $100 total at Starbucks over the course of my 31 years of living, but if it’s the comment I’m thinking of, my bigger point, I think, was that if you pay more attention to the big ticket costs in your life, then you can consume all the high-margin coffee (or alcohol or soda, or hamburgers, or whatever) you want, provided you don’t take that Starbucks habit to unhealthy addiction levels and you don’t take that mentality across EVERY category in your expenses.

If you keep your shelter and car to less than 20% of your pre-tax income, which is what i did when I first bought a condo (and kept a car that was given to me with zero debt on it) on a pre-tax income that was close to $50k, that gives you a lot of wiggle room to intentionally spend the rest of your needs and wants.

Could you use that coffee money in a more meaningful fashion? Absolutely you could! But as someone who has felt a lot of shame over his adult life about accumulating and spending money knowing that there are others who are impoverished, I don’t think you should feel guilty about buying the coffee if it truly does make you happy and enriches your life in some way. And if you’re mortgaged to the tilt with a million dollar home and a luxury car? The coffee really is a drop in the bucket. Does it help? Sure. Is it going to make much of a dent in becoming debt free? I don’t think it will.

I’m clearly all about picking up the extra $100 off the ground, hence my chasing sign up bonuses for banks and credit cards etc. Or when i canceled cable TV to save $50 per month.

There is also a big segment of people who would consider coffee a need. So it’s debatable whether that would come out of the 50% needs rather than the 30% wants. Particularly if they have a long morning commute and getting up early to brew their own coffee would cut into maintaining healthy sleeping habits. I’m not one to decide what someone else considers a want or a need.

I don’t disagree with you. I will always consider $1200 to be a lot of money, but at the same time, if you were to take your mortgage or rent from $30,000/year to $15,000/year, or from $15,000/year to $7,500/year, that allows more wiggle room in spending your dollars on various small dollar splurges (or big dollar splurges, like traveling), and something I’ve learned for myself personally is that shelter is something I don’t feel the need to splurge on. I think a fair bit of millennials have adopted that view, but certainly not all. Obviously not everyone agrees with that as evidenced by the mansions I drive by every day on the way to work. 🙂

There’s very clearly a big segment of people who aren’t necessarily making dumb big ticket financial decisions but still could utilize those “small-dollar” savings to reach some pretty awesome money wins in life. And I’m glad you reminded us (me?) of that.

Oh, I think you’re absolutely right, TJ. I’m sure there are people who lump Starbucks into their general commuting expenses. But I think the real part of the latte factor that doesn’t get addressed enough is the insidious nature of it. One “need” begets another “need” and pretty soon there are a whole bunch of conveniences and indulgences in your life that don’t actually add value. I’m not saying that coffee habits are what keep people broke, but I do think that extra money that is frittered away can be part of why people stagnate in their goals, especially short term goals. And I say that from experience. I also think that you make a great point about going after the big-ticket expenses as well.

That would seem to follow under the heading of that old adage of “If you take care of the pennies, the pounds (dollars) will take care of themselves”. And for some people that holds true, I think. Being cautious and careful about small expenditures from a young age translated to being cautious and careful about large expenditures later on for a lot of people. But for others, being careful and cautious about the big expenditures creates a desire to “reward” themselves for being so “good” in those other areas. Ah, excuse me. Kind of “thinking out loud” so to speak.

Not trying to be argumentative but I never understood the reasoning behind stopping to buy a coffee because brewing coffee at home in the morning takes too long. I’ve done both. Stopping to purchase a coffee always took longer than brewing it at home. And was much more expensive. I’d set my coffeemaker up at night and put my thermos next to it. When I rolled out of bed in the morning, I turned it on. By the time I brushed my teeth, washed my face and brushed my hair….my coffee was brewed and I hadn’t even gotten dressed yet. I’d fill my thermos just before heading out the door and could enjoy 5 mugs of freshly brewed coffee on my way to work. My coffee for an entire week cost less than one Starbucks cup and a whole weeks worth of set up and brewing took less time than stopping at a Starbucks. To each their own of course but I just never understood that line of reasoning.

I’d tend to side with you, Kim, but that’s because I’m not a coffee drinker…and my teas aren’t that fancy. Unless I order a latte from Starbucks, they are opening a tea bag and putting it in hot water. I waited in line for this?! And while I know I can order ahead, then I can’t use my reusable cup. But I guess if people are ordering speciality drinks, maybe it does save time? Not sure!

Ah! I guess I wasn’t thinking in terms of fancy coffees. I drink my coffee black as does the hub’s. No messing about with adding extra calories in the form of sugars and creamers and whatever else is in lattes and frapachinos (?). We go to a Starbucks maybe once a year as a treat and get a fancy coffee and a scone or muffin. Maybe I just don’t understand the mindset of needing an expensive treat every day instead of a treat being a once in a while indulgence. 🙂

$100 both is and isn’t a big deal to me. I would absolutely rescue that poor homeless Benjamin if I were to walk by it. I picked up a total of $.20 while on vacation (at least, I think it was 20 cents. One piece was a Greek coin.) Every little bit adds up over time. My sister has found about $50 total this year just from picking up change. It’s surprising the difference $100 in extra money makes on my savings rate for the month.

On the other hand, $100 is very little to me. My internet bill is almost $100. I spend $100 on my cat in two months. I will happily buy a $100 plane ticket. I don’t go out and waste money, but I will purchase things I need if they’re under that. Over that benchmark definitely makes me pause and consider the purchase more.

As someone who used to pinch pennies on groceries but gladly dropped hundreds of dollars on clothes each year, this post definitely resonated with me. You’re absolutely right that the average American can’t afford to spend $100 per month on coffee or other conveniences because they have other financial priorities to address (debt, loans, savings, etc.)

I think the most important message PF blogs and experts can share is why keeping up with the Jones is not possible for most people! We can get Starbucks and nice clothes and big houses relatively easily, but that doesn’t mean we should if we can’t afford it. Many people are stuck in this mentality, and breaking out of it is the surest way to get our finances in check.

When I was working, two or three times a week someone would announce that they were making a Starbucks run or a Marble Slab run. People really gave me the side eye because I didn’t whip out a $10 bill and hand it over. I overheard comments that I was tight fisted, cheap. It was strange to me the pressure that was put on everyone to participate in these “runs”. So many people that I worked with succumbed to the peer pressure, to be part of the “in crowd” that ate out for lunch every day and stopped at McDonald’s or Starbucks to grab breakfast every morning and forked over $20 or$30 for treats every week. But then they would all complain that they didn’t have money for this or that important thing or something they’d wanted for a long time or that they’d had to put a repair bill on their credit card because “I just don’t know where all my money goes!” lament. It can indeed be a form of keeping up with the Jones’s. As for me, I figured I’d keep my money in my pocket since the Jones’s weren’t paying my bills for me, lol! I didn’t consider myself cheap, I considered myself to be practical. I wasn’t going to put groceries on a credit card because I spent my grocery money on eating out for lunch every day to keep up with the “office Jones’s”!

I really appreciate this perspective, Kim! I wrote a post last year about not being sorry that I don’t go out to lunch with my coworkers. I’ll always offer to go for a walk (if I’m not doing cafeteria supervision) or to brainstorm lesson plans, but I’m not about to drop $10 a day at Panera. No, thanks! I’d be lying if I didn’t say I wrote the post to make myself feel better. I totally did! It’s hard to be the only person who passes on the Starbucks or the Chipotle or whatever else it may be. But it pays off! And I appreciate it that much more when I do treat myself.

Whew! Glad to know I’m not alone, lol. The hub’s and I dug ourselves out of a debt hole (economic downturns, job injury for him, major surgery for our youngest, major surgery for rare thing for me, emergency surgery for him….. sigh…..dr and hospital bills will kill you!). Anyway, once you’ve managed to climb back out of a deep, dark debt hole….. you’re not anxious to fall back in it just to go eat lunch at Panera, lol!

Oh my gosh! You totally inspired me with that story. Major props to you and to him. I hope you’re both doing better and feeling better. Medical bills on top of being ill adds insult to injury for sure! You’re right, Kim. It’s all about perspective. Kudos to you!

It’s also about opportunity cost. If you’re spending $2400 per year on coffee and not funding retirement, that’s going to be pretty painful in the long run. If it’s truly extra money, it depends on how much you value the coffee. Is it better than brownies? A massage? Donating to your favorite charity? Supplies for your hobby? There’s no right or wrong answer, but it’s important to make informed decisions.

$100 is significant to me (and I wouldn’t drop it on coffee, even though I love coffee). That said, we spend $100 a month on things that aren’t necessities. I try to evaluate the spending each month though. If it is spending that’s valuable to me and truly adds value, it’s fine, otherwise I nip the $100 problem as quickly as possible. We also pretty well have our financial ducks in a row and are on track with our goals – if we were in credit card or consumer debt, I’d eliminate that $100 in short order!

Yes to all of this! And I hope that is the mentality most people adopt. If I can cut it, do. But I’m afraid if bloggers all start saying that the latte factor isn’t a big deal, that factor will grow for people who aren’t as aware of their spending.

I’m not a big fan of Starbucks drinks (but those pumpkin scones – delish), so spending $100 there would be INSANITY to me. But it’s all relative. I admit that even though my first thought was “heck yes $100 is a big deal”, I do worry a bit less about spending that amount now that I have a fully stocked emergency fund, automated savings, and very little debt.

Oh, carbs, how I love thee! I’m not a coffee drinker either. I do quite enjoy their chai, but the calories and sugar are enough of a deterrent most times. Seriously, it’s like a small meal! I hope I’ll get to the point where $100 is NBD. For a long time, it wasn’t. And we didn’t go into debt over it, but we did spin our wheels for a really long time!

$100 is absolutely a big deal. As newlyweds trying to make it in an economically crazy world, even $25 or $50 is a big deal some months. On a side note, we save a crap-ton of money by simply not drinking coffee (Orange Juice for the win!). Like you said, $100/month is $1200/year, which means every 10 years you could basically pay cash for a used/inexpensive car. That’s huge when it comes to avoiding debt and planning financially for the future.

$100 is a big deal to my budget. While I’m no longer the earner I once was, each dollar in my budget has a job and if I needed to displace 100 of those little workers, there had better be a good reason for it. And coffee is no where near the top of that list of reasons. Sure I spend on some things that aren’t necessities, but I consider them more important or more useful than coffee. However, if someone has the income and savings to easily accommodate a $100/month coffee habit and that’s how they choose to spend their money, more power to them.

If it is important to you and within your means, bottoms up! And I’m right there with you. My budget definitely accommodates some wants. I do consider that a big deal, though, because I know where we would trim back if a need cropped up.

My husband is nodding as I read him the beer comment. I really like the idea of having a savings rate goal. I suppose we do in our budget. But I still get a little neurotic about spending. Probably because money used to run through my fingers like water, I’m always questioning myself now.

$100 is definitely a lot of money to me, and as an avid coffee drinker, I could not even fathom spending $100 a month on coffee at Starbucks or other coffee shops. We make coffee at home every morning. I maybe at most, purchase a small cup of coffee when I am out running errands maybe twice a month, and that’s only when I need a bit of a pick-me-up 🙂

I’m in the same boat, Mackenzie. I drink tea every morning. But I make it myself. If I have Starbucks gift cards, I’ll grab a chai occasionally. But I can’t justify the calories and the sugar most times.

I think the latte factor is misrepresented a lot. In reality, that pricey latte doesn’t usually happen in a vacuum. I agree you can treat yourself to the occasional latte and still make big financial gains. But when you get into that mindset of constantly treating yourself to fancy coffee, meals out, new clothes you don’t need, etc. on a regular basis, that is going to add up and be a big deal. I don’t need to treat myself for running routine errands on a weekly or daily basis. That’s a habit, or even entitlement, not a treat.

Yes, $100 is a big deal. It’s not the biggest deal, but it makes a difference. And if you take the attitude that $100 isn’t a lot, you can easy slip into thinking larger amounts (or those $100’s spread out over different categories or occasions) aren’t a lot, when they do add up to a big deal.

Kalie, you just summarized “old Penny” perfectly. It is such a slippery slope. A pair of Target shoes here, a clearance rack find there. No big deal. Suddenly, you own 150+ pairs of shoes and wear maybe 10-15. Then, there’s the handbags. And then the designer handbags. And the clothes. And you’re none the wiser because it’s “just one pair of shoes”. Sigh.

Yeah, even if you’re “treating” yourself to clothes and shoes, for instance, off of the 75% racks at Target and finding deals at Ross, when it becomes a habit and you’re purchasing more than you need or can afford…..well, that can start to add up pretty quick and become a problem before you’re even aware of it. Been there, done that.

Just the other day, I was trying to explain a cousin’s spending habits to her husband. Shopping is an outing for her combined with the thrill of the hunt with a side of “I work hard, I deserve a treat”. She bargain shops, hits all the sales, goes through all the clearance sections, uses all the coupons, all of the “rewards dollars”. In her mind, NOT using a 50% off coupon is like leaving money laying on the ground and not stopping to pick it up. If she has a coupon, she will find SOMETHING to use it on whether she needs it or not. And I get it (been there, done that) but her husband simply cannot fathom spending money on things that you don’t need just because they are on sale no matter how cheap the price. It’s hard to change that mindset when it becomes entrenched in your brain. I doubt that she ever will as it’s been her mode of operation for the entire 38 years that I’ve known her. I’m eternally grateful that I could step back from the coupon/sales/rewards and see them for what they are……a clever marketing ploy designed to separate me from my money, lol!

I love this. I have a big project I plan to do coming up all about $100. I can’t WAIT. I want to get HUGE amounts of people to answer a simple survey about $100. Just waiting for Mr. T to figure out the programming of the survey ( to, you know, keep it free since it doesn’t plan to be an income-producing project… just a geeky curiosity project!). 🙂

$100 is HUGE. My wife and I don’t spend $100 without talking to each other first. Mainly it’s me that talks to her because I have a tendency to impulse buy things and she helps talk me through it. I’m not asking for permission as much as having her wise counsel to bounce things off of. But yes $100 is a big deal!!!

When I was a grad student, $100 a month was my grocery budget. There were no fancy coffees (or anything fancy) in my life at all! It’s different now that I’m working as a physician, but there were certainly many years of my life in which $100 was a very big deal.

Wow $100 a month on Starbucks. Crazy. That was definitely me pre-FIRE plans though. I’m saving a ton of money using a cheap Keurig I bought a couple years ago and a pound of good coffee at the grocery store. It comes out to about a dime a cup. I’m glad people are still going to Sbux now though. Good for the property values to have one near your home I hear.

Boom! Thanks for the dose of reality, Penny. And I agree, most people shouldn’t even try fitting in $100 to Stafbucks in their monthly budget. That’s definitely a big deal for me even though I technically could afford it. But instead I’m reading this as I enjoy the free coffee work provides (not the best but it gets the job done).

As someone who knows nothing about coffee (love the smell, hate the taste), I’d wager that mediocre coffee also makes you appreciate the good stuff more. That’s definitely how it works for tea. I think I’m the only person who drinks the Lipton black tea in the teacher’s lounge. It might actually be older than me 😉

Honestly I think it all comes down to what you value. If you live and die for that coffee and its worth working the next 30 years, driving a beater, and living in a shack, then by all means. Life is about choices, the key to personal finance is all about choosing which things you value and cutting out those you don’t. I personally take advantage of cash back out of places like swag bucks to get coffee every so often. How often? Maybe once a week I get a 2 dollar kick other then the cheap swill I make at home. Honestly my coffee kick other then needing the caffeine simply is not that high on the opportunity cost list. However I have plenty of things I spend money on even today that in a lot of peoples eyes would be a waste of 100 dollars or more. I just go in eyes wide open of what I am trading in exchange. Me and my wife have a rule, if its over 100 dollars we discuss. Even living as a hobo on the street with 100,000 dollars in debt has an opportunity cost.

I have always liked the Latte Factor and Dave Ramsey’s overall philosophy (as a non-coffee drinker, for me it had nothing to do with Starbucks and more to do with other things), but I also really enjoyed on of the Slate reporters article highlighting why it doesn’t provide a comprehensive rationale explaining why most Americans are in debt:

Anyone interested in frugal living and budgeting is already leaps and bounds ahead of most Americans, whether $100 seems like a lot of money to them or not. And those of us in that category are generally looking internally at our own budget and making decisions to maximize savings within our own realities. But the article notes how personal finance gurus have seriously neglected the role that the increase in fixed costs (education, housing, health care) have had on the ability to save, which is much more significant than frivolous purchases overall – on a macro level.

Totally true! And finding opportunities to increase income. What’s that saying about small leaks sinking big ships? I think frittering away money (I was an EXPERT at it!) it a symptom of a much bigger problem. For me, it was an unawareness of a better way to handle my money.

I don’t know if you have come across a book called “Financial Recovery” by Karen McCall?

It focuses first and foremost on our emotional relationships to money, and to what it truly represents to each of us, which will be as varied as we are as individuals, but nonetheless, we also exhibit general patterns. It made me confront the ways in which I have sabotaged my own best financial interests and goals, and I spent some time discussing these issues with a counsellor. Even now, aged 50, I am stunned by how I still fall into playing some of those little psychological games with myself and my money.

My big “leakage points” I’ve discovered? Work lunches (£1200 p.a.) and taxis (about £750 p.a.). Yep, it’s on small stuff day to day, but, as you say, small leaks can sink big ships. So, small changes for me are bringing lunch two days per week from home, habituate that then 3 days then…

Taxis: only if they are my only, only option.

But the little changes can also become the focus of change, as a distraction from the bloody great iceberg coming your way!

I had this discussion with a 32 year old friend – a lawyer- who seems to have fallen for the trap of spending on shoes and fashion like she’s Carrie in Sex and the City, while buying the big rundown water mill converted into a home (read: money pit) and thinking that she can afford a live-in nanny. But should she address “the latte factor” she’s been reading so much about??!! I sat there, horrified, as she was speaking and then realised that she could (minus the money pit house) have been describing me, 20 years ago. Luckily our conversation came when she was vulnerable- and therefore more receptive- to suggestions about where to go for advice and perspective from sites like this.

I saw her making coffee at work the other day, we both laughed and she said that she’d come and read this site and others and got a big wake up call. She has opened her first ISA (a tax-free savings account in the U.K.), redirecting her clothes and shoes spending into that).

I have talked to her about her attitudes to money and we’ve found some similarities in our pasts, in terms of childhood deprivations. So, so important to recognise that we do all these things for a reason and tackle that reason emotionally as well as all the “in the world” activities like budgeting and intentional spending. I needed to understand my unwholesome money intentions and their origins before I could replace them with wholesome intentionality which serves me.

I am thrilled that you’ve commented on my blog, Denise. I would love to read more of your writing. You are absolutely right that understanding the why behind our spending (or saving) is essential. How fortunate is your friend to have you?!

Love this! All too often, we want to make things black and white. Lattes = bad, lattes = good. As you point out, it really depends on your situation.

If you are making $100k a year and have a 70% savings rate, $100 probably isn’t a big deal, but for others it can be a huge impact (both by pure numbers and for the psychological margin it buys in your monthly wiggle room).

I think $100 can be a big deal depending on what you value. I recently needed a new vacuum, and spending $150 on one made me want to curl up in a ball in my room until one magically appeared. My solution was to peruse Craigslist and guess what? Found a brand new one for $75. Much better solution.

That same weekend, I took my boyfriend out for a nice dinner and spent well over $100 on it. But for me, that was investing in our relationship, which is well worth the money.

$100 is a big deal, but how you spend it can have a significant impact on how you feel about it.

When I learned that the going rate for vacuums was $200-$400, I never felt better about my decision to install hardwood floors throughout our house! That’s a fantastic point about investing in what matters, Brittney.

Hmmm… the granny in me is wondering “why does it have to cost $100+ to ‘invest in your relationship’, though?”. I used to do that, then it dawned on me that it was the time which was important, not the money spent. Might be worth reflecting on that?

I agree with both Brittney and you, Denise! My husband and I would easily spend $100-$200 a week on dinners out and drinks when we first started dating. We both get a little green around the gills thinking about those times now. But honestly, while I’d like the money back, I don’t regret spending a second of that time with him. I definitely feel better about that kind of spending than I do all the shoes I’ve bought over the years!

I think that $100 is a big deal for most people, but 4$ isn’t. I think it’s that the majority of people aren’t necessarily noticing that it’s costing them that much once you add it up. PF community aside, how many people actually go through their credit card and bank statements and categorize how much they’re spending every month? I definitely never used to. For me, one of Caits shopping ban posts struck a chord with me, how she used to buy coffee as a force of habit and triggers rather than because she really needed coffee. I’m exactly the same. I can rarely finish a tall, but it’s all about the habits built into my morning routine, not because I actually need coffee to wake up.

I agree with the first poster–we have a set budget category for fun money and if a lot of it goes to mochas … well, I get a Venti and nurse it over 2–sometimes even 3!–days, and it brightens my afternoon. Actually, I’ve weaned myself off of them for periods before in the interest of less sugar, and I really missed the “treat” aspect the most–not the mocha itself, but the feeling of going out and treating myself to it. The black coffee and tea drinkers are right that it’s easier and cheaper to do at home. But the thing that other commenters haven’t considered that has nothing to do with either coffee or money–I worked at a Sbux for awhile, and the truth is that for our regulars, this was their bright spot of human connection every morning. They loved that we knew their name and their drink–they felt known and cared about. That was worth the $6 or $8 every working day. (Which, of course, is more a commentary on our society than on their budgeting decisions. What cost human kindness??)

(And to be fair, there aren’t actually Starbucks everywhere–yes, they are on college campuses, but they are a lot less likely to be in less-well-off areas, and they’re downright hard to find through the middle of the country–I’ve driven coast-to-coast a few times, and they are not prevalent throughout–mostly on the coasts.)

Of course, it’s funny to try to work out “what you’re worth” in terms of salary. When I was working at Sbux for $9/hour, I also tutored part-time for $75/hour. So was $100 more than 10 hours of work–or less than 2?? (If you’re wondering, I mostly framed it as 10 hours, since the lower rate was the steady paycheck and the tutoring was bonus.)

What a neat perspective from a barista! I’m so glad you reminded me of that. And I’m right there with you when it comes to tutoring. I don’t make anywhere near $75/hour, but it makes me feel like I have such deep pockets. Then I remember how inconsistent the work can be and go back to mostly making my own tea!

You are so right and I hadn’t even considered the “human contact and conversation” angle. Same reason the old men back home used to go to the cafe downtown every day for lunch instead of fixing a sandwich at home. Other people, human contact.